Answer
The constituents are selected based on a detailed index methodology, available here. Briefly, it relies on:
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Determining a country’s eligibility to be part of the index based on PE/VC investment attractiveness
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Determining country weights factoring the size of its economy adjusted for public sector and Foreign Direct Investment restrictiveness
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Determining sector weights within each country.
With these country and sector weights, our indices include the private companies with the largest shadow price in each country-sector combination till the desired weights are arrived at for each country-sector.
Our methodology also allows for our indices to be rebalanced annually to adjust for changes in country/sector weights. It also allows changes at a monthly level for companies that become ineligible due to dissolution, bankruptcy, or being acquired by another public or private company.
All index maintenance also presents a trade-off between representativeness and turnover, which is overseen by a team of expert index committee members.